|
|||
|
|
|
|
|
Have you ever wanted to invest in a mutual fund that your friends or fellow co-workers have raved about but can't afford the initial investment? Possibly you have called a full-service brokerage house looking for guidance and they were not interested in your business because you could not afford the minimum for the privilege to invest with them.
Many people never invest because they feel that putting away small amounts each month (dollar cost averaging) won't amount to anything in the future. But look at this: if you invested $ 100 a month into any good mutual fund for the next 20 years, and that fund returned 12 percent a year, your total investment would return slightly more than $86,000.
Since the S&P 500 for the last 50 years has returned
13.8 percent per year, your
chance for a 12 percent return could be very good.
What if you have only
$25 to $50 a month to invest? Then do it. The single most restated comment I hear from clients nearing retirement is that they wished they had started to save and invest earlier in life. Remember the $100 a month figure and what it could have grown to.
Start to invest now no matter how small so that the hands of time don't get away from you.
If you don't have the initial first-time investment, usually around $2,500, don't worry, there are many mutual funds that will waive the first-time investment if you sign up for a monthly or quarterly direct deposit from your checking account. Depending on the funds, you don't even have to send in any funds to start with a direct deposit program.
Also, in a test of several of the leading no load (no commission) and load funds, in which I told the telephone representative that I could not afford the first-time investment but would like to make a monthly direct deposit of from $50 to $ 100, I was treated as if I was investing
a lot of money with these funds and made to feel that I was valued as a future client. In cases where I told the representative that I was a financial novice, my questions were answered in simple, uncomplicated language that should not intimidate anyone.
Where do you find these funds? There are several financial magazines that will give you some guidance with the best read being Money Magazine. This magazine is a general all-purpose investing magazine and does list phone numbers for several mutual funds. Another excellent one to read, although more technical, is Mutual Fund Magazine. The local library will have lots of information and research material.
A warning to those of you who are going to look at full-service brokerage houses and banks. Beware. Stay away from mutual funds that have the brokerage houses or banks' name on them. According to Lipper Analytical, the vast majority of these type of funds under perform the non-brokerage house and non-bank counterparts, with banks trailing at the bottom. Also, the brokerage houses and banks make more revenue off their in-house funds. In many cases these institutions strongly recommend that you are shown their funds first. So, buyer beware.
Then you should read on to find low-cost budget investing tips and phone numbers of companies happy to help you and treat you like Rockefeller or even Bill Gates.
[an error occurred while processing this directive]